Nov. 2, 2013

Written by

Marick F. Masters

Detroit Free Press guest writer

Marick F. Masters

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The City of Detroit faces three major deficits as it moves through bankruptcy. The financial deficit, including an $18-billion debt, gets the most attention, but the city also confronts a chronic performance deficiency and an abyss of confidence in its capacity to govern itself.

As the city develops a plan to fix its budget, it must also address the other two deficits, and that poses a conundrum: How can the city substantially cut expenditures without destroying its capacity to improve services with a motivated and well-equipped work force? If the city fails to make such improvements, it shall never regain the confidence of its citizenry, regardless of whether it is temporarily able to plug its financial holes through bankruptcy.

To meet this challenge, Detroit needs a new labor-management strategy that provides both employees and managers with a real voice in making effective change. Such a strategy must be a top priority of the next mayor.

Labor costs comprise the lionís share of the cityís general-fund operating budget. Unfunded pension and retiree health-care liabilities contribute to more than a third of the cityís total debt. Detroit simply cannot escape restructuring its labor costs if it is to survive financially. The question is not whether it must do so, but how it does so.

Crisis, however, presents opportunity, and the city must seize the moment to chart a new direction in labor-management relations.The next mayor should promptly take four concrete steps to put such relations on a footing aimed squarely at improving the delivery of essential public services.

First, the mayor should establish a citywide Detroit Labor-Management Council for Service Improvement that is made up of key union leaders and top city executives, along with representatives of the community and businesses. He should charge this council to develop a comprehensive plan that ensures operational requirements to improve services are aligned with budgetary realities in a way that increases the capacity of the city to perform while recruiting, deploying and retaining a qualified work force. The councilís plan should provide the corpus of the cityís proposal to restructure and exit bankruptcy.

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Second, the mayor should mandate the establishment of similarly focused service-improvement labor-management councils at each work site, where city employees and their line managers interact with the public. The work-site councils should be required to take immediate steps to improve services, whether that means reducing waiting time in city offices, answering citizensí incoming phone calls in a timely manner, responding to an emergency, fixing a broken streetlight, or demolishing a blighted building. City employees and their managers on the front lines of delivery often know what works best and what does not. Empower them to be problem solvers and hold them accountable.

Third, the mayor should work with the unions to form a structure of coalition bargaining in which the city negotiates one master labor agreement rather than dozens of separate ones that perpetuate operational fragmentation. Union leaders and their executive counterparts need to work as teams, putting aside internal rifts and concentrating on one Detroit. The parties need to see how their negotiations fit into the bigger picture of operating the city.

Finally, the mayor needs to invest in employees and their managers through targeted education and training initiatives that will yield tangible returns. Budget deficits far too often provide a ready excuse to move in exactly the opposite direction of disinvestment. Such short-sightedness, however, is self-defeating. The city needs talented and well-trained employees who are equipped, engaged and empowered. Meeting this challenge does not happen by accident. If the city were to spend a fraction of what the emergency manager has spent on bankruptcy consultants, it could probably get this training done.

To some, a bold service-focused labor-management strategy may seem utopian. Chronic naysayers will jump at the chance to say the goal is unattainable. The reality, however, is that not moving in this direction would only repeat the mistakes of the past.

Marick F. Masters is director of Labor@Wayne, which includes Wayne State University's Labor Studies Center, the Douglas A. Fraser Center for Workplace Issues and the universityís undergraduate and graduate labor programs.